Friday, November 30, 2007

Morgan shed its private equity activities in September 2004 after a number of leveraged buyout shops complained that bankers were crowding in on deals. Morgan, led then by Purcell, spun off Morgan Stanley Capital Partners as Metal Mark Capital. that proved to an ill-timed move as LBO activity exploded and rivals especially goldman Sachs reaped billions in profit.

John Mack, wh took over as CEO in June 2005, want MS to take more principal risks, including a return to PE business. Morgan created a principal investment arm with up to $2.5 billion to spend.

Morgan plans to raise $6billion buyout fund over the course of the year. It will contribute $2B from its funds. Morgan has PE team in Hong Kong. It is expected to close $1 B buyout fund in few weeks. The bank also plans to raise a $2.5 B infrastructure investment fund